Just my thots...
1. .003" clear is
way too much on that engine. About 1/2 that is GTG. [IMO anyway].
2. I would find out EXACTLY what the crank dimensions are. You may need to juggle some brg sizes to get it right. [Kinda difficult w/ an undersized crank]. The crank shop should have put the finish on the grind to a dimension that would give you the correct clearances without fudging the brgs. Did you tell them .003? Did they do that?
3. My first encounter w/ Jim Ruggles involved a 109 build. One of his very obvious rules were, "DO NOT drive welch plugs into the oil galleys. He used only very thin pipe plugs that he made.
4. Crank polishing should be done in a specific manner. The "fuzz" that the polishing belt raises, has to be laid over so that the ends are facing back from the direction of crank travel. The fuzz will then not cut into the brg surfaces. [Jim Ruggles, circa 1987].
5. The engine would come completely apart if it was mine..Too much crud floating to suit "miss picky".:biggrin:
6. As for the noise,,, Given the condition of the brgs, and your target of .003 clear, I'd say they were the source.
7. If that engine were in my shop, it would get ALL new brgs, hot tanked, ALL dimensions checked and verified, new cam/lifters, and a ft cover inspection/set up.[But, that's just an old fart being a bit anal!]